Some co-ops form when an opportunity arises – a house they are already living in comes onto the market for example. More commonly, they start with a group coming together and working out how to meet their needs.

It is usually best for co-ops to buy a property, as then they can build up capital, be more in control of their property and not be supporting a landlord. This section will focus on purchasing property. Though, sometimes good opportunities come up to rent property for less than a co-op can raise in income from the property. This can help the co-op to build up capital for a future purchase (or for whatever they prioritise).

What you can afford depends on how many members you have, what rent levels you will set, how much money you can raise and what terms you can borrow it on.

== Projecting your cashflow ==
Radical Routes have produced a spreadsheet for house purchase cash flow projections which can help you model and compare different possibilities. You start by feeding in your best guesses about the planned purchase – how many tenants? Paying what rent levels? What does a house cost in the area you want to live in that could house these people? Have you been offered any loans or donations already? Make sure to factor in the legal fees and other charges as well. We have produced more guidance on how to use this [[40-year modelling spreadsheet|40-year modelling spreadsheet]].

When setting your rent level, we recommend choosing an affordable amount which can be fully covered by housing benefit. This keeps your housing co-op accessible for those most likely to face housing difficulties. Also, when the Radical Routes network is assessing an application for a RR loan, it is much less likely to be approved if rent is above Local Housing Allowance.

Consider if you can allow flexibility on when rent is paid - for example people on benefits may need to pay rent on a different day of the month to account for their benefits schedule, and people getting student loan may benefit from being able to pay several months of rent upfront when loans come in.

Soon you will get a picture of the gaps that need filling, such as how large a mortgage you need to borrow. Don't get disheartened if at this stage it looks like you can't afford to house your members, it usually takes a fair amount of rejigging to get things to work for your needs. Try your cash flow out with different proportions of [[Finance-getting money for a house#Loan stock|loan stock]] type and [[Finance-getting money for a house#Mortgage|mortgage]] type loans, and different repayment lengths to see what is best for you. A plan that needs you to refinance (find replacement loans to pay back original ones) in year 10 or so is fine, but the more often you need to find new people to borrow from and the more money you need to borrow each time, the harder it will be. In particular, if you need to refinance, this should be for significantly less than the original amount you borrowed, and usually not more than £100,000.

A purchase should work if all of the incomes are higher than the all the expenses and allow for the paying off of loans over time, often over quite a long time!

== Mortgage ==
Like with a private house purchase, most of the finance is usually raised with a mortgage.

Normally a mortgage lender will be prepared to lend you up to 70%-80% of the value of the property. The bank will tell you what your monthly repayments will be if you borrow a certain amount, you can also get these figures from many mortgage calculators available on the web. Extending the length of a mortgage-type loan costs more over time but it also reduces monthly costs, which can make a business plan work much better.

Fewer mortgage lenders are now willing to lend to co-ops. At the time of writing your best chance is to approach [https://ecology.co.uk Ecology Building Society] or [https://www.triodos.co.uk/ Triodos bank]. It may also be worth trying local building societies. Interest rates offered vary, so contact the lenders early on in the process to find out what they might offer as it will affect your cashflow projections. They will not commit to lending to you at this stage but it is useful to start a conversation.

== Loan Stock ==
[[Loan stock|Click here for more detail on raising loan stock]]

== Grant funding ==
There is sometimes funding available from the government, councils or public bodies. This will vary depending on your situation, shifts in policy, and the type of problems big organisations are motivated to deal with locally. Your local council, and Community Development Workers, may be able to tell you of funding schemes relevant to you. Funding schemes are often very specific in what they are willing to fund, and will take a lot of time and bureaucracy to apply for. This is sometimes called Regeneration funding, or Community Development funding, though may be called other things.

You might be able to raise money this way while maintaining the independence of your co-op, but it also possible you will told to give up the aim of tenant control and settle for tenant participation with control by a housing association. In this case, you may have to choose between operating as a tenant-controlled housing co-op, or becoming something else.

The Architectural Heritage Fund may offer funding to coops in listed buildings.

Affording a house

2025-12-05T11:00:15Z

Sim.brighton:

Affording a house

2025-12-05T10:59:11Z

Sim.brighton:

Affording a house

2025-12-05T10:58:40Z

Sim.brighton: trying to get this page to work

hello

MediaWiki:Sidebar

2025-12-05T10:57:59Z

Sim.brighton:

* general wiki navigation
** mainpage|mainpage-description
** Special:AllPages| All Pages
** MediaWiki:Sidebar| Edit Navigation Menu
** recentchanges-url|recentchanges
** helppage|help-mediawiki

* What are housing co-ops
** Housing_Co-ops_-_What_and_Why?| Housing Co-ops, what and why
** Different_types_of_housing_co-ops| Different types of housing co-op
** Being_a_landlord_(at_the_same_time_as_being_a_tenant)| Being a tenant/landlord
** Secondary_Rules| Secondary rules

* People
** Forming_a_group| Early recruitment and decisions
** Conflict_between_members| Conflict between members
** Breaking_down_hierarchies| Breaking down hierarchies
** Disability_and_Accessibility| Disability and accessibility

* Finance for co-ops
** Affording_a_house| Affording a house
** 40-year_modelling_spreadsheet| 40-year RR modelling spreadsheet
** Loan_stock| Loan stock
** Buying_a_property:_The_legal_process| The buying process
** Insurance | Insurance
** Working_on_your_property_-_maintenance_and_renovation| House maintenance and renovation

* Early set up of a co-op
** Legally_registering_as_a_housing_coop| Legally registering as a co-op
** Early_finances,_setting_up_a_bank_account,_applying_for_tax_relief| Early finances, bank account, tax relief

* SEARCH
* TOOLBOX
* LANGUAGES

2025-05-25T19:29:24Z

Sim.brighton: /* Filling in the spreadsheet */

The 40-year modelling spreadsheet is also called the financial modelling spreadsheet, the Radical Routes spreadsheet, the 40-year spreadsheet or the business plan.

This spreadsheet gets updated regularly, sometimes multiple times a year, by [https://www.catalystcollective.org/ Catalyst Collective]. At the time of writing, in May 2025, the most up to date version is version 3.3.5. The latest version of the spreadsheet is available in the [https://files.radicalroutes.org.uk/s/mtzWPw7DoidqoNf RRModel Spreadsheet] online file storage.

The spreadsheet works best when downloaded to a device, and opened [https://www.libreoffice.org/download/download-libreoffice/ Libreoffice] - in the .ods file format. '''Libreoffice''' is a free, open source office suite similar to Microsoft Office. Once Libreoffice is downloaded, the spreadsheet software we recommend using, and that the spreadsheet was designed to be used on, is called LibreOffice Calc. It is possible to use Google Sheets or Microsoft Excel however we have noticed glitches in the calculations and protected cells, therefore advise against it.
=Information required to enable filling in the spreadsheet=
It can be quite overwhelming to look at this spreadsheet. Some people with more spreadsheet experience have taught themselves how to use it. We recommend collecting all of the figures needed before trying to fill it in. Radical Routes Finance Group are happy to be contacted for advice or support to fill this in.
==Information to collect before filling in the spreadsheet==
If you are trying to fill in the spreadsheet, it will help to have the following information to hand. This guidance has come about from filling in the spreadsheet for an already housed coop. Much of it will also be applicable to an unhoused coop, and in some places estimate figures will need to be used.
# '''Cash in the bank''' - This is total money in the co-op's name, in all co-op bank accounts, including savings.
# '''Fixed assets''' - Find this information on the most recent balance sheet, representing the value of all property owned by the coop. This is zero if your co-op does not own any property.
# '''Rental income''' - Be careful to input this correctly, either per week or per month
# '''The most recent mortgage statement''' - The information needed from this document is 1) capital balance, 2) interest rate, and 3) monthly payment.
# '''Radical Routes loan statement''' - The header of this document should say ""Co-operative & Community Finance"" as well as Radical Routes because CCF administer RR loans. The information needed from this document is 1) capital balance, 2) interest rate, and 3) monthly payment'' </br> [[file:a Radical Routes loan statement.png]] </br>
# '''Outstanding loanstock details''' - This should include 1) starting dates, 2) length in years, 3) interest rate, 4) amount, 5) simple/compound interest. The name of the lender should only include the initials, so for example loanstock from Zara Chowdhary should appear as 'ZC'. This is so that when the spreadsheet is shared externally, the loanstock investors are not identifiable. </br>
# '''Annual council tax'''
# '''Annual [[Insurance|insurance]] cost'''
# '''Annual maintenance spend''' - This could be the average over 3 years, or an annual maintenance budget, or an estimate with a minimum of £250 per bedroom per year.
# '''Local Housing Allowance rate''' - LHA is calculated by inputting the postcode of the property on the [https://lha-direct.voa.gov.uk/ government LHA calulator]. The figure we use generally is the shared accommodation rate - correlating to one person paying 1 rent per bedroom. However, other rates may be applicable if, for example, a member is entitled to the 1 bedroom rate if they are receiving disability benefits, more bedrooms if they have dependents etc.
# '''Bank charges''' - Many RR coops bank with Coop bank (free), or Unity Trust Bank (£72 per year, or £6 per month).
# '''Any other regular income''' - For example - regular donations.
# '''Any other regular expenses''' - For example, travel, website hosting costs, internet or a building service charges. This should not include electric, gas or water bills as RR recommends these costs are dealt with as separate from the co-op's expenses, and housing co-ops charge separately for bills. The spreadsheet may or may not include internet expenses, depending on whether this is paid for by the coop.

=How to input data into the spreadsheet=
Most cells are protected, and so cannot be edited. It is recommended to keep the spreadsheet in protected mode so as not to change any of the formulae. Only '''the purple cells''' are editable. Orange sections are for existing coops, and yellow sections are for new coops, or purchasing a new property.
==Inputting data by Sheet==
===Sheet name: Info and Ongoing Inc&Exp===
Here you can input the '''rental income''' and '''other income'''

For co-ops applying for a RR loan, rental income will need to be below [https://lha-direct.voa.gov.uk/ LHA]. Co-ops should be aware of the risk to losing their exemption for corporation tax if they are receiving any income that is not rent from members.

Here you can input the expenses: '''void percentage'''; '''house [[insurance | insurance]]'''; '''maintenance'''; '''council tax'''; '''bank charges'''; '''accountant costs'''; '''other expenses.'''

===Sheet name: Day1 Inc&Exp===
Data to input - '''Cash in the bank; day 1 expenditures (such as property purchase cost, mortgage fees, RR loan fees, Day 1 maintenance work, surveys''' etc. Scrolling down to the bottom of this page you should also input the '''value of any existing properties.'''

===Sheet name: Existing Loans===
This page calculates how much '''already existing loans''' money the coop owes in mortgages, other "mortgage-type" loans that are repaid on a monthly basis, or loanstock.

The capital balance reading date is the last date covered on the most recent loan statement.

The remaining capital balance is the amount of the loan that the co-op is due to repay - this could be in the tens or hundreds of thousands of pounds.

===Sheet name: New Loans===
This page models for any new mortgage-type loans, future mortgage-type loans, new loanstock, and future loanstock. The difference between '''new''' and '''future''' is that new starts from the year the spreadsheet is set in, whereas future can be set up to start at any point in the next 40 years.

====Automatic Loanstock Refinancing====

There is also a function in the 'Future Loanstock' section to turn on '''automatic refinancing'''. This is where the spreadsheet automatically adds in extra loanstock when it is needed. You can turn this on/off by selecting yes/no in the dropdown. To see the where the automatic loanstock has been added in, go to the '''Yearly Breakdown''' page - Money In - Loanstock In, and scroll across to see any non-zero figures. Loanstock In also appears as green vertical bars on the graph at the bottom of the Yearly Breakdown page.

===Sheet name: Yearly Breakdown===
Check that the rate of inflation is set to 3%, and the rent increase rate is set to at least 2%.

There is a 3% increase in the ‘Mortgage Interest rate change’ sheet over the first 10 years. This is based on Ecology Building Society's stress testing policy. The actual interest rate is inputted per loan in the New Loans or Existing Loans sheet. The lender's interest rate (often Ecology Building Society, or Triodos) includes the Bank of England 'base rate' that fluctuates.

=Testing the viability of the spreadsheet=

Once '''all sheets''' have been filled in, there are a number of things to check that the business plan is viable/sustainable, that income covers all expenditure, and that the bank balance remains positive.

On the '''Info and Ongoing Inc&Exp''' sheet, scroll to the bottom of the page, and check that the '''ongoing surplus''' is positive and ideally above £1200 per year.

On the '''Year 1 Breakdown''' sheet, scroll to the bottom of the page, and check that the '''balance''' is positive. Scroll to the right and check all 12 month bank balances are positive.

The '''Yearly Breakdown''' page is the main page to pay attention to to see that the business plan is viable. The bank balance needs to be positive at all times. On version 3.3.5 of the spreadsheet, the Bank Balance appears on Row 93, but in other versions it may appear higher or lower than this.

At the bottom of the '''Yearly Breakdown''' page, there is a graph that represents the bank balance over 40 years. This should have an upward trend, which means that the co-op is accumulating money over time and therefore can cover any unexpected costs.

40-year modelling spreadsheet

2025-05-25T19:28:29Z

Sim.brighton:

The 40-year modelling spreadsheet is also called the financial modelling spreadsheet, the Radical Routes spreadsheet, the 40-year spreadsheet or the business plan.

This spreadsheet gets updated regularly, sometimes multiple times a year, by [https://www.catalystcollective.org/ Catalyst Collective]. At the time of writing, in May 2025, the most up to date version is version 3.3.5. The latest version of the spreadsheet is available in the [https://files.radicalroutes.org.uk/s/mtzWPw7DoidqoNf RRModel Spreadsheet] online file storage.

The spreadsheet works best when downloaded to a device, and opened [https://www.libreoffice.org/download/download-libreoffice/ Libreoffice] - in the .ods file format. '''Libreoffice''' is a free, open source office suite similar to Microsoft Office. Once Libreoffice is downloaded, the spreadsheet software we recommend using, and that the spreadsheet was designed to be used on, is called LibreOffice Calc. It is possible to use Google Sheets or Microsoft Excel however we have noticed glitches in the calculations and protected cells, therefore advise against it.
=Filling in the spreadsheet=
It can be quite overwhelming to look at this spreadsheet. Some people with more spreadsheet experience have taught themselves how to use it. We recommend collecting all of the figures needed before trying to fill it in. Radical Routes Finance Group are happy to be contacted for advice or support to fill this in.
==Information to collect before filling in the spreadsheet==
If you are trying to fill in the spreadsheet, it will help to have the following information to hand. This guidance has come about from filling in the spreadsheet for an already housed coop. Much of it will also be applicable to an unhoused coop, and in some places estimate figures will need to be used.
# '''Cash in the bank''' - This is total money in the co-op's name, in all co-op bank accounts, including savings.
# '''Fixed assets''' - Find this information on the most recent balance sheet, representing the value of all property owned by the coop. This is zero if your co-op does not own any property.
# '''Rental income''' - Be careful to input this correctly, either per week or per month
# '''The most recent mortgage statement''' - The information needed from this document is 1) capital balance, 2) interest rate, and 3) monthly payment.
# '''Radical Routes loan statement''' - The header of this document should say ""Co-operative & Community Finance"" as well as Radical Routes because CCF administer RR loans. The information needed from this document is 1) capital balance, 2) interest rate, and 3) monthly payment'' </br> [[file:a Radical Routes loan statement.png]] </br>
# '''Outstanding loanstock details''' - This should include 1) starting dates, 2) length in years, 3) interest rate, 4) amount, 5) simple/compound interest. The name of the lender should only include the initials, so for example loanstock from Zara Chowdhary should appear as 'ZC'. This is so that when the spreadsheet is shared externally, the loanstock investors are not identifiable. </br>
# '''Annual council tax'''
# '''Annual [[Insurance|insurance]] cost'''
# '''Annual maintenance spend''' - This could be the average over 3 years, or an annual maintenance budget, or an estimate with a minimum of £250 per bedroom per year.
# '''Local Housing Allowance rate''' - LHA is calculated by inputting the postcode of the property on the [https://lha-direct.voa.gov.uk/ government LHA calulator]. The figure we use generally is the shared accommodation rate - correlating to one person paying 1 rent per bedroom. However, other rates may be applicable if, for example, a member is entitled to the 1 bedroom rate if they are receiving disability benefits, more bedrooms if they have dependents etc.
# '''Bank charges''' - Many RR coops bank with Coop bank (free), or Unity Trust Bank (£72 per year, or £6 per month).
# '''Any other regular income''' - For example - regular donations.
# '''Any other regular expenses''' - For example, travel, website hosting costs, internet or a building service charges. This should not include electric, gas or water bills as RR recommends these costs are dealt with as separate from the co-op's expenses, and housing co-ops charge separately for bills. The spreadsheet may or may not include internet expenses, depending on whether this is paid for by the coop.
=How to input data into the spreadsheet=
Most cells are protected, and so cannot be edited. It is recommended to keep the spreadsheet in protected mode so as not to change any of the formulae. Only '''the purple cells''' are editable. Orange sections are for existing coops, and yellow sections are for new coops, or purchasing a new property.
==Inputting data by Sheet==
===Sheet name: Info and Ongoing Inc&Exp===
Here you can input the '''rental income''' and '''other income'''

For co-ops applying for a RR loan, rental income will need to be below [https://lha-direct.voa.gov.uk/ LHA]. Co-ops should be aware of the risk to losing their exemption for corporation tax if they are receiving any income that is not rent from members.

Here you can input the expenses: '''void percentage'''; '''house [[insurance | insurance]]'''; '''maintenance'''; '''council tax'''; '''bank charges'''; '''accountant costs'''; '''other expenses.'''

===Sheet name: Day1 Inc&Exp===
Data to input - '''Cash in the bank; day 1 expenditures (such as property purchase cost, mortgage fees, RR loan fees, Day 1 maintenance work, surveys''' etc. Scrolling down to the bottom of this page you should also input the '''value of any existing properties.'''

===Sheet name: Existing Loans===
This page calculates how much '''already existing loans''' money the coop owes in mortgages, other "mortgage-type" loans that are repaid on a monthly basis, or loanstock.

The capital balance reading date is the last date covered on the most recent loan statement.

The remaining capital balance is the amount of the loan that the co-op is due to repay - this could be in the tens or hundreds of thousands of pounds.

===Sheet name: New Loans===
This page models for any new mortgage-type loans, future mortgage-type loans, new loanstock, and future loanstock. The difference between '''new''' and '''future''' is that new starts from the year the spreadsheet is set in, whereas future can be set up to start at any point in the next 40 years.

====Automatic Loanstock Refinancing====

There is also a function in the 'Future Loanstock' section to turn on '''automatic refinancing'''. This is where the spreadsheet automatically adds in extra loanstock when it is needed. You can turn this on/off by selecting yes/no in the dropdown. To see the where the automatic loanstock has been added in, go to the '''Yearly Breakdown''' page - Money In - Loanstock In, and scroll across to see any non-zero figures. Loanstock In also appears as green vertical bars on the graph at the bottom of the Yearly Breakdown page.

===Sheet name: Yearly Breakdown===
Check that the rate of inflation is set to 3%, and the rent increase rate is set to at least 2%.

There is a 3% increase in the ‘Mortgage Interest rate change’ sheet over the first 10 years. This is based on Ecology Building Society's stress testing policy. The actual interest rate is inputted per loan in the New Loans or Existing Loans sheet. The lender's interest rate (often Ecology Building Society, or Triodos) includes the Bank of England 'base rate' that fluctuates.

=Testing the viability of the spreadsheet=

Once '''all sheets''' have been filled in, there are a number of things to check that the business plan is viable/sustainable, that income covers all expenditure, and that the bank balance remains positive.

On the '''Info and Ongoing Inc&Exp''' sheet, scroll to the bottom of the page, and check that the '''ongoing surplus''' is positive and ideally above £1200 per year.

On the '''Year 1 Breakdown''' sheet, scroll to the bottom of the page, and check that the '''balance''' is positive. Scroll to the right and check all 12 month bank balances are positive.

The '''Yearly Breakdown''' page is the main page to pay attention to to see that the business plan is viable. The bank balance needs to be positive at all times. On version 3.3.5 of the spreadsheet, the Bank Balance appears on Row 93, but in other versions it may appear higher or lower than this.

At the bottom of the '''Yearly Breakdown''' page, there is a graph that represents the bank balance over 40 years. This should have an upward trend, which means that the co-op is accumulating money over time and therefore can cover any unexpected costs.